ASTANA: Kazakhstan said Monday it would receive over a billion dollars in compensation after settling a dispute over profit-sharing at a lucrative oil and gas field with private investors.
The former Soviet state’s energy ministry said it had reached a “mutually advantageous…friendly settlement” with the five energy firms that make up the consortium at the Karachaganak oil and gas condensate field in the country’s northwest.
The out-of-court settlement reflected the “experience of cooperation over the years” with Russia’s Lukoil, Eni of Italy, US energy giant Chevron, Netherlands-headquartered Shell and Kazakhstan’s state energy champion KazMunaiGas.
Kazakhstan’s energy ministry first revealed it had filed an international arbitration claim against the consortium last year.
In addition to $1.1 billion the consortium will pay Kazakhstan under the terms of the settlement, Kazakhstan expects to receive $415 million in additional revenues up to 2037 thanks to changes to the profit-sharing mechanism, the energy ministry said.
The calculation for additional revenues is based on an oil price of $80 per barrel, the ministry noted.
Karachaganak is among Kazakhstan’s most important energy fields and one where Western and Russian energy companies cooperate closely despite the ever-present threat of sanctions caused by geopolitical tensions.
The field produced 5.2 million tonnes of oil in the first five months of this year, according to the energy ministry.
Kazakhstan depends strongly on oil exports to power its un-diversified economy and has watched its tenge currency shed half its value relative to the dollar since floating it under pressure from low prices in 2015.–AFP